According to the head of the IEA, for the first time solar energy investment exceeds oil

Investment in solar power is set to exceed spending on oil production for the first time this year, the head of the International Energy Agency said, highlighting a surge in clean energy development that will help curb global emissions if the trend continues.

“If these clean energy investments continue to grow as they have over the past few years. . . we will soon see a very different energy system emerge and we will be able to keep the 1.5 degree target alive,” IEA Executive Director Fatih Birol told the Financial Times about the Paris agreement to limit global temperature rise. .

This year, $1.7 billion is projected to be spent on clean technologies, while $1 billion is expected to be spent on fossil fuels. Five years ago, annual energy investment of $2 billion was evenly split between fossil fuels and clean technologies such as renewables, electric vehicles and low-emission fuels.

Birol said “a new global clean energy economy is emerging,” adding, “For someone like me who gets his hands dirty with data every day, this is a striking, dramatic change.”

According to the IEA’s annual report, the rise in clean energy spending is driven by a strong recovery in economic growth following the Covid-19 pandemic, as well as concerns about price volatility and energy security sparked by Russia’s full-scale invasion of Ukraine last year. The World Energy Investment report was published on Thursday.

Enhanced policy support, such as the US Inflation Reduction Act, which provided $369 billion in subsidies and tax credits for clean energy technologies, also helped, the report said.

As a result, the IEA expects annual investment in clean energy to jump 24 percent compared to 2021, while spending on fossil fuels will rise 15 percent, it added.

According to Birol, solar energy has been the “star of global energy investments,” with total spending expected to exceed $1 billion per day, surpassing spending on oil production.

The IEA chief attended the recent G7 summit in Japan and said he was encouraged by the level of energy coordination between G7 members and invited countries such as Brazil, India and Indonesia. “I have rarely seen such a homogeneous picture of the future of energy markets,” he added.

However, to maintain momentum, G7 leaders must ensure that current spending on clean energy is extended to more emerging and developing countries, Birol said. “If there is one challenge, it is whether emerging countries will be able to finance the transition to clean energy on their own,” he added.

Despite the boom in clean energy spending, global energy-related carbon dioxide emissions rose by 0.9 percent to 36.8 billion tons last year, the IEA said in March.

Birol also called on national and international oil companies to spend more on low-carbon energy solutions. According to the IEA’s analysis, the oil and gas industry’s total investment in low-emission energy sources is less than 5 percent of the total amount spent on fossil fuel production.

“I hope there is more parallel between what international and national oil company leaders are saying about their concerns about climate change and what they are doing in terms of their investments,” Birol said.